Tender Guarantee/Bid Bond

A written document issued by Bank of China, at the request of the tenderer for bids of construction and procurement of project, committing that the tenderer will not withdraw or amend its bid during the validity period of the bid, and will sign the contract or submit performance guarantee within the preset time once winning the bid.

Mediate the issue of mutual distrust between the tender owner and tenderer and  as well to promote the smooth progress of the bidding; use Tender Guarantee/Bid Bond to replace cash deposits to reduce the financial pressure on tenderer.

1. Mediate the isssue of mutual mistrust between tenderer and tender owner. Bank of China who has good reputation acts as a guarantor to provide guarantee for the tender owner;
2. Improve capital turnover. As an alternative to cash margin, it can reduce capital occupation  of the tenderer;
3. Indemnify the disadvantage party and penalize the defaulting party in case of breach of contract to avoid and reduce contract breaching activities, thus saving trouble and expenses arising from litigation or arbitration.

1. Contractors involved in contracted projects;
2. Suppliers involved in material procurement projects.

I. Application for letter of guarantee

1. The applicant fills out an application form for issuance of a letter of guarantee;

2. The applicant provides margin deposit or submits other counter guarantee;

3. The applicant submits copy of the contract agreement and any supporting documents related to the contract;

4. The applicant submits other documents necessary for issuance of a letter of guarantee as required by Bank of China.
 

II. Examination and issuance of letter of guarantee

1. Bank of China examines the customer qualification, underlying transaction and relevant documents;

2. Bank of China confirms the customer's margin deposit or credit line and other mortgages;

3. Bank of China examines the written application and form of the letter of guarantee;

4. Bank of China issues the letter of guarantee accordingly.